A new social economy law that will help grow worker co-operatives passed the first reading in the French Senate on 7 November. The Bill will be introduced into the French National Assembly in the coming months.
The Bill would create a judicial framework designed especially for co-operatives. It was devised to foster co-operative development and enable the modernisation of co-operatives, but it would not impact on the French worker code.
The document grants employees the right to be informed in case the enterprise is to be taken over. If they receive the support they need, employees can take over their company and successfully manage it.
The taking over by employees tends to be the last resort and happens when companies go bankrupt. The document argues that this should not necessarily be the case, adding that the taking over by employees enables maintaining the same structure and employment.
The law seeks to encourage the taking over by employees and to do so proposes creating a right for employees to have access to information in advance, thus the owner would have to inform them about his intentions in advance to enable them to have time to prepare an offer for taking over the company.
Thus enterprises with less than 50 employees will have to inform them of the intention to sell at least two months in advance. The owner is free to choose the best offer, but he needs to inform the employees of his intentions so that they can make an offer. Furthermore an external investor in the business can own more than 50 per cent of the capital of a SCOP for a limited period of seven years. This would enable employees to become majority stakeholders 8 years on from the transformation of the enterprise into a SCOP (a co-operative society).
The Senate also adopted an amendment enabling the creation of co-operative development funds financed by co-operative enterprises. The law authorises the use of reserve funds by employees to rebuy the capital shares from the external investor.
If the Bill is adopted, employees will be able to become members of other worker co-operatives, without having to work for that particular enterprise, as long as the enterprise that employs them and the one of which they become members are part of a group of the same society of worker co-operatives.
“Our ambition is to place employees as viable potential owners, empowered by their competence”, said French Minister for Social Economy, Benoît Hamon. He added that every year over 50,000 jobs are lost in France as a result of enterprises being sold.
